What Does outsourcing Mean
The dictionary produced by the Royal Spanish Academy ( RAE ) does not recognize the term outsourcing . On the other hand, a concept that is used as a synonym does appear: outsourcing .
Outsourcing or outsourcing is a practice carried out by a company when it hires another firm to provide a service that, initially, should be provided by itself. This process is usually done with the aim of reducing costs .
Take the case of a company that is dedicated to website development . This company offers its customers the launch of a site including accommodation (hosting) the design and drafting of contents. However, it only offers accommodation and design directly, since the contents are written by a communication agency to which it subcontracts. This outsourcing is convenient from the economic point of view: it is cheaper for the entity to pay for the writing to another company than to add writers to its staff.
It is important to bear in mind that whoever hires the original service should not notice any change in the conditions or have problems due to outsourcing. That is to say: if the person who hired the web development service in the previous example is not satisfied with the wording, it will be sent to the company that sold the service and not to the communication agency that was subcontracted in the operation.
It should be noted that outsourcing often implies savings for the company but a precariousness of working conditions for workers. For example, many employees who work their shifts in branches of large companies with an international presence, have contracts with small companies that provide specific services, so their salaries are not comparable with those of those who have been hired directly.
This practice is very common and, in many cases, it is considered necessary for the survival of a company, regardless of its reputation or its capital. It is that financial savings is not the only advantage that someone seeks when they resort to outsourcing, but there is also the possibility of avoiding staff training , for which it would also be necessary to have specialized employees as part of the stable workforce .
In addition, outsourcing solves another problem that has led many companies to bankruptcy: it avoids maintaining personnel that only becomes necessary for periods , to cover part of the development of certain very specific projects, but that does not fulfill an essential function for the main activity . Stories of "very generous" employers who cannot take responsibility for putting someone out of work are common, and thus continue to pay wages to people who no longer have any work to do; the end of these stories is often bankruptcy, suffocating debt, and employee unhappiness at leaving without having collected all their money.
Nowadays, outsourcing is the basis of the economy of Internet-based companies: as mentioned in the example on the website, small specialized groups are usually involved in the development of a project , each of which provides its services and then he legally dissociates himself from the employer, having collected his fees.
Another example that sometimes goes unnoticed occurs in the making of a movie or a video game: generally, film companies and high- budget video game developers hire several independent teams to collaborate on well-defined objectives , such as creating special effects, composing music or physically training actors for stunts or physical dexterity.